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Life is unexpected. While we may eat a well-balanced diet and exercise regularly, we become more susceptible to certain ailments as we age. With the right cover though, seniors health insurance can help take the financial burden off your shoulders if you fall ill or become injured and let you enjoy the life you’ve worked so hard for.

As such, let us answer your questions and guide you through health insurance for older Australians.

What is seniors health insurance?

Health insurance for seniors over 65 is suitable for both singles and couples and helps pay for your healthcare expenses as a private patient in and out of hospital as you age. These policies can vary depending on your current and future needs.

Why is private health insurance for seniors so important?

When it comes to public waiting lists for important surgeries, there’s little recourse for you to jump the queue. This is less of an issue with private hospital cover, however. Instead, you only need to observe private waiting lists, which tend to be much shorter.

For instance, if you don’t have health insurance and required a hip replacement surgery, you would be placed on a waiting list that could take a month or even longer in the public system.

The amount of time in which 50% of patients waited for their surgery in 2018-19 was 41 days.¹

However, if you have the right level of private hospital cover, you may only need to wait a matter of days or weeks (provided you have served your waiting periods) to undergo surgery, get the problem fixed and continue to enjoy life’s adventures.

In short, private health insurance can help you get back to your day-to-day activities much faster.

What does health insurance for seniors cover?

a senior woman staying in a private hospital covered by health insurance

Health Insurance is about offering choice when it comes to your health care. It can include a range of services so seniors can choose a health insurance policy that will suit their current and future needs. Keep in mind initial policy waiting periods do apply so planning ahead can be important.

Health Insurance policies are made up of hospital coverextras cover or combined hospital and extras cover. You may wish to consider some of the following treatments and services to be included once you have served your waiting periods.

Hospital cover

Private hospital health insurance covers towards treatment in a private hospital when you choose to be admitted as a private patient. You can choose your doctor, stay in a private hospital room (if one is available) and enjoy greater flexibility in scheduling your medical procedures.

  • Some treatments and services that senior customers often prefer to include in their cover are:
  • heart surgery, including bypass surgery, angiograms, and stents
  • joint replacement, including surgery and replacement of joints
  • major eye surgery, including cataract surgery
  • in-hospital rehabilitation and psychiatry
  • cancer treatments
  • palliative care.

Extras cover

This side of health insurance is there to subsidise out-of-hospital care that Medicare does not pay a benefit towards, such as dental, prescription glasses and physiotherapy consultations.  An extras policy can include:

  • optical, which can cover prescribed glasses and contact lenses
  • physiotherapy, which is designed to restore proper body function and reduce permanent disease or injury through exercise programs, manual therapies, and electrotherapy techniques
  • remedial massage to treat injuries and encourage recovery
  • chiropractic, which treats health issues related to nerves, muscles, and skeletons
  • podiatry and orthotics
  • psychology Consultations
  • speech therapy, including the treatment of stroke victims.
  • hearing aids, including the design, repair, and replacement of the aids
  • dental including major dental such as dentures and partial plates
  • health aids and appliances, like glucose monitors, crutches, and blood pressure monitors.

What isn’t covered by health insurance that might affect seniors?

Private health hospital insurance offers the majority of its seniors’ support where the treatment is completed as an inpatient in a private hospital setting, i.e. hip or knee replacements, or cataract removal. Private extras products can aid towards the cost of specific items that do not attract a Medicare subsidy such as prescription glasses, hearing aids or dental work such as dentures or partial plates.

Medicare subsidises items such as:

  • visits to your GP;
  • eye exams with your optometrist (not the glasses);
  • consultations with a hearing specialist (not the hearing aids);
  • access to partially government-funded aged care to help lower costs towards many services for eligible seniors.

Private health insurance doesn’t offer coverage towards services that aren’t listed under the Medicare Benefits Schedule (MBS), such as general medical check-ups you might be required to take when taking out a life insurance policy.

a happy senior man wearing glasses

How much can health insurance for seniors cost?

The cost of health insurance depends on the type of coverage you select. Ensuring you don’t include redundant services like family-planning is one important way to reduce the cost of coverage.

Luckily, health insurance for seniors over 65 attracts a higher government rebate than younger policyholders to help reduce the cost of premiums. As outlined in the table below, the standard rebate amount is 29.236% for singles over 65 years old earning $90,000 or less and families over 65 years old earning $180,000 or less.² The standard rebate on health insurance for seniors over 70 is higher again and is applied at a rate of 33.413%.

 

Earning thresholds
Singles< $90,000$90,001 – 105,000$105,001 – 140,000> $140,001
Families< $180,000$180,001 – 210,000$210,001 – 280,000> $280,001
Rebate percentage
AgeStandardTier oneTier twoTier three
< 6525.059%16.706%8.352%0%
65 – 6929.236%20.883%12.529%0%
70 >33.413%25.059%16.706%0%
Medicare Levy Surcharge (MLS)
All ages0.0%1.0%1.25%1.5%

Source: Australian Government Private health Insurance Rebate, PrivateHealth.gov.au.

N.B. These rebate levels are applicable from 1 April 2019 to 31 March 2021. Families include single parents, couples, and de facto couples. You may be eligible for a private health insurance rebate if you:

  • are eligible for Medicare
  • have a complying health insurance product (either extras or hospital cover)
  • have an income below Tier Three for MLS purposes.

Additional costs

Lifetime Health Cover (LHC), introduced in July 2000, is a financial loading that applies to anyone that hasn’t taken out, and continuously held, private hospital cover before the 1st of July following their 31st birthday.  This loading is charged on top of your hospital premium at two per cent for each year you haven’t held hospital cover after 1 July following your 31st birthday or 1 July, 2000, or if you have not held continuous hospital cover for the past 10 years.

This rate is capped at a maximum of 70% and is removed once you have held and paid the LHC loading for 10 years.

The Medicare Levy Surcharge (MLS) will hit high-income earners with up to 1.5% of their annual income if they don’t hold private hospital cover. This is not to be confused with the Medicare Levy, which applies to all taxpayers, as the MLS is charged on top of the levy. You’ll only have to pay the MLS if you earn more than $90,000 as an individual, or $180,000 as a couple or family.

So, if you’re still working, or are earning money from investments and earn over these thresholds in taxable income, private hospital insurance could help prevent this added cost.

Frequently asked questions

Does it cost more for seniors to get covered?

A senior pays the same as any younger individual for the same level of private health insurance.

Why? Private health insurance is community rated, which means everyone – no matter their age or condition – can purchase the same policy at the same price. The exception here is LHC, where you could be required to pay a higher premium if you attract the loading.

On top of this, health funds cannot deny policies to certain people based on their health or the likelihood of them claiming on certain services.

What if I have pre-existing conditions?

That’s completely fine. You can still include extras and hospital benefits in your cover that relate to your conditions at no extra premium; the only limitation is the waiting period. Once you have served the relevant waiting period, you will receive the full benefit associated with the condition – as long as it is covered by the policy, of course.

What is pre-existing condition?

A pre-existing health condition is any illness, ailment, or condition that you had signs or symptoms of in the six months before you took out a policy, or upgraded to a higher level of cover. This condition does not need to have been diagnosed by your doctor. There is usually a twelve-month waiting period before any pre-existing conditions can be covered, except for rehabilitation, psychiatric care or palliative care, which have a two-month wait.

Why are there waiting periods and how long are they?

Waiting periods prevent people from claiming on certain parts of their health insurance policy within a particular timeframe. Without them, someone could sign up, claim on an expensive treatment, and then cancel after receiving their benefit – without paying anything substantial on their policy. This type of behaviour would disadvantage other members and would result in increased premiums for all fund members.

Standard waiting periods for hospital cover are as follows:

  • 12 months for pre-existing conditions, except for psychiatric care, rehabilitation or palliative care, where the period is two months
  • 12 months for obstetrics (pregnancy)
  • 2 months in all other circumstances.

Whilst commonly similar, individual funds set the waiting periods for extra policies. Make sure you are fully aware of all the waiting periods that apply to you.

What doesn't Medicare pay for?

When it comes to private hospital treatments, Medicare covers 75% of the Medicare Benefits Schedule (MBS) fee, which is a listing of prices for various treatments the Australian Government deems adequate for the service. Private hospital insurance policies cover the remaining 25% if you’re treated as a private patient in a public or private hospital.

Certain medical or hospital charges may exceed what you can claim back from Medicare and your health insurance combined, as health practitioners can charge more than the MBS fee – this is known as the ‘gap’. To help reduce these out-of-pocket expenses, some health funds offer gap cover by making arrangements and agreements with hospitals and particular doctors.

Some services Medicare doesn’t pay towards include:

  • hospital accommodation costs for private patients
  • cosmetic surgery
  • ambulance services
  • most dental examinations
  • acupuncture
  • home nursing
  • glasses and contact lenses
  • hearing aids
  • the majority of physiotherapy, chiropractic, podiatry, and psychology services.

How can you get covered?

Ensure your golden years shine bright with the peace of mind knowing you have proper cover for your health needs; after all, the best health insurance for seniors is one that’ll protect you against what life throws at you.

Our health insurance comparison service can help you compare health funds for seniors in just a few minutes! Simply enter in some details into our free service to get started.

Sources

¹ Elective surgery. Australian Institute of Health and Welfare, Australian Government. 2020.
² PrivateHealth.gov.au – Australian Government Private Health Insurance Rebate. Accessed September 2020.

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